Europe's Recession Strangling Manufacturing, Which Fell In March To A Three-Month Low, And Worsening Unemployment, Up To 12%, Highest Level Since Record-Keeping Began

People wait in a queue to enter a government-run employment office in Madrid.

Photo: Reuters

Unemployment in the recession-mired euro zone has climbed to 12 percent -- with youth unemployment in Greece at 54.8 percent and at 55.4 percent in Spain -- while the monetary union’s manufacturing last month plunged to a three-month low.

Markit’s Purchasing Managers Index, a widely followed gauge of manufacturing, showed Tuesday that factories in the euro zone’s 17 member states came in at 46.8 in March, slightly higher than analysts polled by Reuters had expected but still below 50, the level beneath which manufacturing is contracting.

“The downturn in the euro zone manufacturing sector deepened in March,” Markit said in a statement, adding that the euro zone PMI has “now remained below the neutral 50.0 mark since August 2011.”

Particularly troublesome was that manufacturing in Germany contracted.

“The breakdown revealed a particularly sharp decline in export orders, but all of the components remained below 50,” said Capital Economics. “The French and Greek headline indices remained the weakest of the countries surveyed, despite a small rise in the former. The Italian, Spanish and German indices all fell too, leaving the latter back below 50 again.

Turkey’s manufacturing sector was the strongest in the region.

On the unemployment front, Eurostat, the European Commission’s statistical agency, said Tuesday that joblessness in February was 12 percent, overall. That compares with February 2012, when unemployment was 10.9 percent.

The latest report was the worst since record-keeping began and the 22nd consecutive worsening of the metric.

About 19.07 million people don’t have jobs in the euro zone, Eurostat said. In the 27-member European Union there are 26.34 million people without work.

Greece had the highest average rate at 26.4 percent, with Spain a close second at 26.3 percent and Portugal with 17.5 percent. In February 2012, Greece’s unemployment was 21.4 percent, Spain’s was 23.9 percent and Portugal’s was 14.8 percent.

The lowest unemployment was registered in Austria at 4.8 percent, Germany at 5.4 percent, Luxembourg at 5.5 percent and the Netherlands at 6.2 percent.